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Winter 2015

ISSN 0890-913X

Volume 30, Number 4

Categories: Winter 2015 | Economics

Linking Austrian and Keynesian Economics: A Variation on a Theme

Mark Skousen, Chapman University

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TheJournalofPrivateEnterprise30(4),2015,97–112LinkingAustrianandKeynesianEconomics:AVariationonaThemeMarkSkousen�ChapmanUniversity______________________________________________________AbstractInthespiritofRogerGarrison’sattempttolinkAustrianeconomicswithKeynesianeconomics,IcreatedanAustrian-stylefour-stagemodeloftheeconomy(grossoutput,orGO)thatlinkstheentireproductionprocesswiththeKeynesianmodeloffinaleffectivedemand,orgrossdomesticproduct(GDP).AsasupplementtoGDP,GOcanbeintegratedintotextbooknationalincomeaccounting.MypaperconcludesthatGOisamorecomprehensivemeasureoftheeconomyandbetterreflectstheroleofbusinessspendingintheeconomyandthebusinesscycle.ItturnsoutthatbusinessspendingislargerthanGDPandalmosttwicethesizeofconsumerspending.GOisalsosubstantiallymorevolatilethanGDPthroughoutthebusinesscycle.WiththeBureauofEconomicAnalysisnowpublishingaquarterlyGOstatisticalongwithGDP,GOhasbecomeamajorfocusofeconomicresearchandreportingbythefinancialmedia.______________________________________________________JELCodes:A2,E1,E2,M2Keywords:grossdomesticproduct,grossoutput,businessinvestment,consumerspending,RogerGarrison“TheHayekiantriangleiscomparableintermsofthesimplicity/realismtrade-offtotheKeynesiancross.”—RogerGarrison,TimeandMoney(2001,p.11)“Grossoutput[GO]isthenaturalmeasureoftheproductionsector,whilenetoutput[GDP]isappropriateasameasureofwelfare.Botharerequiredinacompletesystemofaccounts.”—DaleJorgenson,J.StevenLandefeld,andWilliamD.Nordhaus,ANewArchitecturefortheUSNationalAccounts(2006,p.5)�ThispaperhasbeenrevisedfromthepresentationatAPEEmeetingsinApril,2014,inasessionhonoringtheworkofRogerGarrison.IthankEdwardStringhamandananonymousrefereefortheircommentsandimprovements.SpecialthankstoNedPiplovicforprovidingthegraphsandcalculationsforGOandGDEinthispaper.97

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Metadata [hide]

Title	Linking Austrian and Keynesian Economics: A Variation on a Theme
Authors/Creators:	Mark Skousen, Chapman University
Year:	2015
Volume:	30
Number:	4
Pages:	97 - 112
Publisher:	The Association of Private Enterprise Education
ISSN:	0890-913X
Document Type:	Articles
Keywords:	gross domestic product, gross output, business investment, consumer spending, Roger Garrison

Citation:
Skousen, Mark / 2015. "Linking Austrian and Keynesian Economics: A Variation on a Theme." The Journal of Private Enterprise, 30(4): 97-112.